Optimum Communications’ fourth quarter results were well received by the market, as the company delivered revenue above Wall Street expectations despite ongoing subscriber losses and a challenging competitive landscape. Management credited disciplined operating execution, cost-cutting initiatives, and improvements in product mix for driving margin expansion and a notable adjusted EBITDA increase. CEO Dennis Mathew emphasized, “This foundational work was critical as competition intensified across nearly every market and promotional activity reached unprecedented levels.” The quarter also reflected progress in customer experience metrics and a continued focus on optimizing the company’s portfolio.
Is now the time to buy OPTU? Find out in our full research report (it’s free for active Edge members).
Optimum Communications (OPTU) Q4 CY2025 Highlights:
- Revenue: $2.18 billion vs analyst estimates of $2.13 billion (2.3% year-on-year decline, 2.3% beat)
- EPS (GAAP): -$0.15 vs analyst estimates of -$0.01 (significant miss)
- Adjusted EBITDA: $902.2 million vs analyst estimates of $894.7 million (41.3% margin, 0.8% beat)
- Operating Margin: 18.2%, up from 15.2% in the same quarter last year
- Broadband Subscribers: 3.81 million, down 188,500 year on year
- Market Capitalization: $748 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Optimum Communications’s Q4 Earnings Call
- Kutgun Maral (Evercore ISI) asked about the timeline for broadband subscriber stabilization, given the competitive environment. CEO Dennis Mathew indicated foundational work in 2025 would allow for a more aggressive go-to-market approach in 2026, but cautioned that Q1 remains challenging.
- Frank Louthan (Raymond James) inquired about recent debt refinancings and the LightPath ABS deal. CFO Marc Sirota explained that these actions improved liquidity and financial flexibility, but emphasized continued need for meaningful debt reduction.
- Michael Rollins (Goldman Sachs) questioned the sustainability of broadband ARPU gains. Sirota credited product mix and disciplined pricing actions, while Mathew noted enhanced visibility and control over ARPU trends across geographies and channels.
- Sebastiano Petti (JPMorgan) sought clarification on nonrecurring revenue in LightPath and its contribution to EBITDA. Sirota clarified that while some revenue was tied to large contracts, core LightPath business exhibited steady underlying growth and expanding margins.
- Vikash Harlalka (New Street Research) asked about the rationale for slowing fiber migrations and future cost savings opportunities. Mathew explained the pause was to refine the migration process for maximum customer value, while Sirota said further efficiency gains are expected from AI and workforce optimization.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch closely for (1) signs of improvement in broadband subscriber losses and the effectiveness of new bundled offerings; (2) continued margin expansion driven by cost discipline and AI-driven operational efficiencies; and (3) growth in the LightPath fiber business, particularly in serving enterprise and hyperscale customers. Execution on network upgrades and disciplined capital deployment will also be key indicators of long-term value creation.
Optimum Communications currently trades at $1.61, in line with $1.62 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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